February Expiration Results

February expiration happened on Friday. And the results were mixed. I experimented with hedging via the SPY contract. There is probably some merit in doing this, but I think the strategy I was employing isn't the proper way to do it. The "hedging" provided a significant drag on my results in February options. As such, I will shelve this idea for now.

In closed stock positions, my portfolio gained a robust 27% on equity. However, my hedging ops in SPY cost me an equally robust 16% hit against my equity. Combined then, the total gain in closed positions equals = a shade above 10%.

However, a troubling situation is beginning to brew. I've rolled-over 4 losing positions from February into March positions. And I'm fighting with a couple more March positions. My stance is to stick with these positions (continuing to roll up/down as they move, and/or roll to the next month if necessary) until such time that I can profitably exit these positions.

This would seem to fly in the face of conventional wisdom (cut your losers short, let your winners run). However, considering that each of these positions has a known maximum loss, and time decay is always working in my favor, I figure I should be able to be patient and eventually the position will come to me.

Unfortunately, this mentality forces me to endure some swings in equity which are larger than I originally thought. For now, I'm going to continue to bite the bullet and trust my intuition, while continuing to ruminate on alternatives.

The calendar month of February is almost up, and if it ended today....my account would be down about 10% since January 31. Let's hope this next week repairs some damage.